Fiscal 2018 second quarter consolidated net income was $179.0 million,
or $1.60 per diluted share, compared with consolidated net income of
$164.7 million, or $1.55 per diluted share in the prior-year quarter.

Adjusted income from continuing operations was $175.2 million, or
$1.57 per diluted share after excluding an income tax benefit of $3.8
million, or $0.03 per diluted share, related to the Tax Cuts and Jobs
Act of 2017 (the TCJA). Net income from continuing operations was
$162.0 million, or $1.52 per diluted share for the same quarter last
year.

The company's Board of Directors has declared a quarterly dividend of
$0.485 per common share. The indicated annual dividend for fiscal 2018
is $1.94, which represents a 7.8 percent increase over fiscal 2017.

For the six months ended March 31, 2018, consolidated net income
was $493.1 million or $4.47 per diluted share, compared with
consolidated net income of $289.8 million, or $2.74 per diluted share
for the same period last year. Adjusted income from continuing
operations for the six months ended March 31, 2018, which excludes a
one-time income tax benefit related to the TCJA of $165.7 million, or
$1.50 per diluted share, was $327.4 million, or $2.97 per diluted share,
compared with adjusted net income from continuing operations of $276.1
million, or $2.61 per diluted share in the prior-year period.

“Our results continue to benefit from the significant capital
investments we are making to modernize our infrastructure to improve
system safety and reliability,” said Mike Haefner, President and Chief
Executive Officer of Atmos Energy Corporation. "We remain on track to
meet our fiscal 2018 guidance range of $3.85 to $4.05 per diluted share.
Also, we expect our customers will save over $100 million annually from
the recently enacted Tax Cuts and Jobs Act. We have made significant
progress during the quarter to ensure that our customers receive the
full benefit of these savings,” Haefner concluded.

Results for the Three Months Ended March 31, 2018

Operating income decreased $16.2 million to $269.0 million for the three
months ended March 31, 2018, from $285.2 million in the prior-year
quarter. The decrease primarily reflects the lower statutory tax rate in
revenues due to the TCJA and higher operation and maintenance expenses
in the current-year quarter.

Distribution contribution margin increased $22.8 million to $472.2
million for the three months ended March 31, 2018, compared with $449.4
million in the prior-year quarter. Contribution margin reflects a net
$27.6 million increase in rates, primarily in the Mid-Tex, West Texas,
and Kentucky/Mid-States Divisions. Net consumption increased $9.3
million, primarily due to weather that was 43 percent colder than the
prior-year quarter. Transportation contribution margin increased $4.3
million quarter over quarter primarily due to the addition of new
industrial customers. These increases were partially offset by a
decrease of $26.2 million as a result of incorporating the lower
statutory tax rate in revenues due to the TCJA.

Pipeline and storage contribution margin increased $9.3 million to
$120.5 million for the three months ended March 31, 2018, compared with
$111.2 million in the prior-year quarter. This increase is attributable
to a $16.5 million increase in rates, due to the Atmos Pipeline–Texas
rate case and the Gas Reliability Infrastructure Program (GRIP) filing
approved in December 2017, partially offset by a decrease of $8.0
million as a result of including the lower statutory tax rate in
revenues due to the TCJA. Additionally, transportation fees and volumes
increased contribution margin a net $1.7 million due to wider spreads
and positive supply and demand dynamics affecting the Permian Basin.

Continuing operation and maintenance expense for the three months ended
March 31, 2018, was $161.1 million, compared with $132.2 million for the
prior-year period. This $28.9 million increase was primarily driven by
expenses incurred as part of a planned outage in the Mid-Tex Division in
March 2018 and increased system maintenance and other expense during the
quarter.

Results for the Six Months Ended March 31, 2018

Operating income increased $15.4 million to $510.5 million for the six
months ended March 31, 2018, compared to $495.1 million in the
prior-year period, which primarily reflects positive rate outcomes,
stronger customer consumption, and customer growth in the distribution
business, partially offset by reduced revenues as a result of
implementing the TCJA and higher operation and maintenance expense in
the current-year period.

Distribution contribution margin increased $60.5 million to $869.3
million for the six months ended March 31, 2018, compared with $808.8
million in the prior-year period. Contribution margin reflects a net
$53.1 million increase in rates, primarily in the Mid-Tex, West Texas,
and Kentucky/Mid-States Divisions. In addition, net consumption
increased $15.0 million, primarily due to weather that was 33 percent
colder than the prior-year period. Transportation contribution margin
increased $6.0 million period over period primarily due to the addition
of new industrial customers. These increases were partially offset by a
decrease of $26.2 million as a result of incorporating the lower
statutory tax rate in revenues due to the TCJA.

Pipeline and storage contribution margin increased $25.3 million to
$246.1 million for the six months ended March 31, 2018, compared with
$220.8 million in the prior-year period. This increase is primarily
attributable to a $30.4 million increase in revenue from the Atmos
Pipeline–Texas rate case and the GRIP filing approved in December 2017,
partially offset by a decrease of $8.0 million as a result of including
the lower statutory tax rate in revenues due to the TCJA. In addition,
transportation fees and volumes increased contribution margin by a net
$3.1 million due to wider spreads and positive supply and demand
dynamics impacting the Permian Basin.

Continuing operation and maintenance expense for the six months ended
March 31, 2018 was $290.6 million, compared with $257.2 million in the
prior-year period. This increase was primarily driven by expenses
incurred as a result of the aforementioned planned outage experienced in
March and increased maintenance activities in the distribution segment
in the current year.

Capital expenditures increased $134.6 million to $694.0 million for the
six months ended March 31, 2018, compared with $559.4 million in the
prior-year period, due to continued spending for infrastructure
replacements and enhancements.

For the six months ended March 31, 2018, the company generated operating
cash flow of $751.4 million, a $199.4 million increase compared with the
six months ended March 31, 2017. The period-over-period increase
primarily reflects successful rate case outcomes achieved in fiscal 2017
and changes in working capital, primarily as a result of the timing of
gas cost recoveries under purchased gas cost mechanisms and increased
customer consumption and transportation margins.

The equity capitalization ratio at March 31, 2018 was 59.6%, compared
with 52.6% at September 30, 2017. On November 28, 2017, Atmos Energy
completed the public offering of 4,558,404 shares of common stock for
gross proceeds of approximately $400 million. Atmos Energy used the net
proceeds of $395.1 million from this offering to repay short-term debt
under its commercial paper program, to fund capital spending primarily
to enhance the safety and reliability of its system, and for general
corporate purposes.

Outlook

The leadership of Atmos Energy remains focused on enhancing system
safety and reliability through infrastructure investment while
delivering shareholder value and consistent earnings growth. Atmos
Energy expects fiscal 2018 earnings to be in the previously announced
range of $3.85 to $4.05 per diluted share, excluding the one-time,
non-cash income tax benefit. Capital expenditures for fiscal 2018 are
expected to be approximately $1.4 billion.

Conference Call to be Webcast May 3, 2018

Atmos Energy will host a conference call with financial analysts to
discuss the fiscal 2018 second quarter financial results on Thursday,
May 3, 2018, at 10:00 a.m. Eastern Time. The domestic telephone number
is 877-485-3107 and the international telephone number is 201-689-8427.
Mike Haefner, President and Chief Executive Officer and Chris Forsythe,
Senior Vice President and Chief Financial Officer will participate in
the conference call. The conference call will be webcast live on the
Atmos Energy website at www.atmosenergy.com.
A playback of the call will be available on the website later that day.

This news release should be read in conjunction with the attached
unaudited financial information.

Forward-Looking Statements

The matters discussed in this news release may contain “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. All
statements other than statements of historical fact included in this
news release are forward-looking statements made in good faith by the
company and are intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of 1995.
When used in this news release or in any of the company's other
documents or oral presentations, the words “anticipate,” “believe,”
“estimate,” “expect,” “forecast,” “goal,” “intend,” “objective,” “plan,”
“projection,” “seek,” “strategy” or similar words are intended to
identify forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results to
differ materially from those discussed in this news release, including
the risks and uncertainties relating to regulatory trends and decisions,
the company's ability to continue to access the credit and capital
markets and the other factors discussed in the company's reports filed
with the Securities and Exchange Commission. These factors include the
risks and uncertainties discussed in the company's Annual Report on Form
10-K for the fiscal year ended September 30, 2017.

Although the company believes these forward-looking statements to be
reasonable, there can be no assurance that they will approximate actual
experience or that the expectations derived from them will be realized.
The company undertakes no obligation to update or revise forward-looking
statements, whether as a result of new information, future events or
otherwise.

Non-GAAP Financial Measures

The historical financial information in this news release utilizes
certain financial measures that are not presented in accordance with
generally accepted accounting principles (GAAP). Specifically, the
company uses contribution margin, defined as operating revenues less
purchased gas cost, to discuss and analyze its financial performance.
Its operations are affected by the cost of natural gas, which is passed
through to its customers without markup and includes commodity price,
transportation, storage, injection and withdrawal fees, along with
hedging settlements. These costs are reflected in the income statement
as purchased gas cost. Therefore, increases in the cost of gas are
offset by a corresponding increase in revenues. Accordingly, the company
believes contribution margin is a more useful and relevant measure to
analyze its financial performance than operating revenues. The term
contribution margin is not intended to represent operating income, the
most comparable GAAP financial measure, as an indicator of operating
performance, and is not necessarily comparable to similarly titled
measures reported by other companies.

In addition, the enactment of the TCJA required the company to remeasure
its deferred tax assets and liabilities at its new federal statutory
income tax rate as of December 31, 2017, which resulted in the
recognition of a one-time, non-cash income tax benefit of $165.7 million
during the six months ended March 31, 2018. Due to the non-recurring
nature of this benefit, the company believes that income from continuing
operations and diluted earnings per share from continuing operations
before the one-time, non-cash income tax benefit, provides a more useful
and relevant measure to analyze its financial performance than income
from continuing operations and consolidated diluted earnings per share
from continuing operations. Accordingly, the discussion and analysis of
the company's financial performance will reference adjusted income from
continuing operations and diluted earnings per share, which is
calculated as follows:

Three Months Ended March 31

2018

2017

Change

(In thousands, except per share data)

Income from continuing operations

$

178,992

$

162,012

$

16,980

TCJA non-cash income tax benefit

3,791

—

3,791

Adjusted income from continuing operations

$

175,201

$

162,012

$

13,189

Consolidated diluted EPS from continuing operations

$

1.60

$

1.52

$

0.08

Diluted EPS from TCJA non-cash income tax benefit

0.03

—

0.03

Adjusted diluted EPS from continuing operations

$

1.57

$

1.52

$

0.05

Six Months Ended March 31

2018

2017

Change

(In thousands, except per share data)

Income from continuing operations

$

493,124

$

276,050

$

217,074

TCJA non-cash income tax benefit

165,675

—

165,675

Adjusted income from continuing operations

$

327,449

$

276,050

$

51,399

Consolidated diluted EPS from continuing operations

$

4.47

$

2.61

$

1.86

Diluted EPS from TCJA non-cash income tax benefit

1.50

—

1.50

Adjusted diluted EPS from continuing operations

$

2.97

$

2.61

$

0.36

About Atmos Energy

Atmos Energy Corporation, headquartered in Dallas, is the country's
largest fully-regulated, natural-gas-only distributor, serving over
three million natural gas distribution customers in over 1,400
communities in eight states from the Blue Ridge Mountains in the East to
the Rocky Mountains in the West. Atmos Energy also manages company-owned
natural gas pipeline and storage assets, including one of the largest
intrastate natural gas pipeline systems in Texas. For more information,
visit www.atmosenergy.com.